Is The Indianapolis Mayor Worried About The Airport Finances?

Indianapolis Airport Authority(IAA) and a private company wanting to build an off-site parking facility for traveling passengers of the airport are at odds legally according to The Indianapolis Star.

Legal fees have reached at least $45,000 as the city-owned airport continues its effort to stop Cincinnati-based Chavez Properties and Parking. The company seeks to develop a 3,700-space parking lot south of I-70, near the main freeway entrance to the airport. The legal dispute involves what a 1990s-era land-use plan allowed in the Ameriplex park. The airport, which sold the land nearly two decades ago, argues that a private parking lot there would violate the intent behind the plan. Instead, airport officials contend, the space should be reserved for large warehouses and office buildings.

The airport authority has already loss this case once in Marion County Court and will probably lose again through the Indiana Appeals Court. The contract would have to be very clear in terms of the sale. The airport is getting beat on competition in where passengers choose to park and what experience they receive. This worries the airport immensely because parking fees make up 25% of their revenue they bring each year. The Star also reports on the rates of the current private companies already existing:

Its base drive-up rate, $8.50 per day, is cheaper than the airport’s surface lots, though a fuel surcharge and airport access fee can push up the total cost to between the airport’s $9-a-day economy lot and $12-a-day long-term lot. However, there are discounts for parking a full week and other promotions.

Here is an account from one passenger on parking away from the airport:

Duncan Giles, a federal union leader who travels occasionally for work, opts for the valet service at the off-site lot. Lot workers usually are chipper as they unload his car, he said, and he said the place feels secure. Upon his return, the car is warmed up and cleared of any snow. While the airport’s garage valet service is $20 a day, “I usually can get it for under $12 a day (off site), everything included,” said Giles, 51, who lives on the Southeastside. “You really can’t beat it.”

I have been watching the IAA and their numbers the past six months. This airport was heralded as a major economic stimulus to the area with a lot of promises attached to it when completed in 2008. Total cost ran about $1 Billion while being backed by bonds. Passenger numbers are dwindling which affect landing fees the airport takes in. Last year alone the airport only had two months of passenger counts beating expectations (February/March). The rest of the months they fell short of projected goals. First three months of this year the airport is down 1% in passenger traffic.

On top of the passenger decline, costly repairs are mounting up from inadequate construction. One example is the $100 Million dollar parking garage that is only 5 years old is facing up to almost $2 Million in repairs in fixing major leaks from faulty drainage.

On Sunday in The Indianapolis Star, it was reported the IAA is relying on parking, retail and landings fees to repay the bonds that financed the new airport terminal. Mayor Greg Ballard weighed in:

“We’ve got a whole lot of bonds (to repay) at the airport. We’ve got to repay them”

Obviously, the Mayor has taken the side of IAA in this legal battle because he knows what damage this could do to revenue generated long term. For all intensive purposes if IAA starts losing more money the city would have to step in to shore up losses. In my experience following politics, someone like a Mayor making comments like this shows he is seeing the same numbers I do. He probably hasn’t had the best of meetings in long term financials numbers the accountants are presenting to him.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s